At Bayes Business School and City, University of London, we are celebrating #MuslimStories during November as part of Islamophobia Awareness Month. We will be sharing the inspirational and interesting journeys some of our Muslim alumni have been on, which we hope will spark meaningful and engaging conversations, through the transformative power of storytelling.
In this conversation with Zainal Mohd Kassim (BSc Actuarial Science, 1978), senior partner at Actuarial Partners Consulting and former President of the Actuarial Society of Malaysia, we spoke about developments in Islamic Insurance, his career and how he found himself becoming an actuary.
As the first actuary to practice takaful in Malaysia, how have you seen the Islamic Insurance develop over the years?
I started my journey in Islamic Insurance in 1985. At the start of the journey there were many challenges. One major challenge was the then small Shariah compliant asset universe. This meant that the design of Islamic Insurance long term products was by default, also constrained. The other major challenge was the difficulty in effectively communicating the differences between Islamic Insurance and conventional Insurance to the various stakeholders. This can partly be attributed to, unlike insurance, how Islamic Insurance is put into practice can vary significantly from one country to another.
Things have changed for the better. Malaysia now has a deep sukuk market (Islamic bonds) which has allowed actuaries to manage the asset liability management (ALM) aspect of the business. In addition, there has been significant progress in the public understanding of Islamic Insurance.
A significant portion of the credit for the success of Islamic Insurance in Malaysia must go to the Insurance regulator in Malaysia. It issued timely rules and regulations for the orderly development of the Shariah compliant financial sector.
When implemented properly, Islamic finance and insurance is about sharing rather than a transfer of risks, whether that be investment or insurance risks. Actuaries have a very important role to play in the intermediation process within the Islamic financial system.
With the rise of technology, what trends do you expect to see within takaful soon?
A lot has been said about insurtech. The insurance business however is a difficult business to disrupt. There is no magic bullet as insurance is bought, not sold, and it is a heavily regulated business. Takaful, given the additional layer of complications overlaying the basic insurance model, poses an additional challenge to those looking at using technology to disrupt the industry. I am of the opinion though, that there is an opportunity for insurtech to be successful when it comes to adopting Islamic Insurance for affinity groups and the like, where both claim frequency and claim severity are not subject to unexpected variation over time.
Please could you tell us about your role at Actuarial Partners Consulting.
I have been associated with this firm ever since returning to Malaysia in 1982. The firm was then called Duncan C. Fraser, an offshoot of an actuarial consulting practice of the same name in the UK. At the start, there were only five of us in the firm, now there are 50 with eight qualified actuaries. I am the managing partner. The firm is owned by its partners.
As a past president of the Actuarial Society of Malaysia, as well as your fellow and associate roles, and your strategic analysis and setup of takaful and retakaful operators in Asia, Africa and Europe, what do enjoy most about working in the insurance industry?
I have been fortunate to involve myself in Islamic Insurance from the beginning. As Malaysia was a pioneer in the development of Islamic Insurance, many countries looked at Malaysia as a leader in this field. Being one of the few actuaries with experience in the technical aspects of Islamic Insurance then opened many consulting opportunities globally.
At the same time the actuarial profession in Malaysia was in a nascent stage. I was among the first group of Malaysians to qualify as a Fellow of the Institute of Actuaries. At that time, there were barely a handful of qualified actuaries (including Society of Actuaries actuaries) practicing in the country. When I was the President of the Actuarial Society of Malaysia (ASM) in the eighties, it was a small group and our activities were limited. The ASM has since grown by leaps and bounds, and its success was partly due to the pioneer group of Fellows that contributed positively to the development of the profession in Malaysia.
I can say that after being a consultant for over forty years (and counting), what I enjoy most is looking out for new challenges and providing mentoring to the younger actuaries and would-be actuaries in the country.
What inspired you to become an actuary and why did you choose to study your BSc in Actuarial Science at City, University of London?
In a sentence, it was a skillset very much lacking in Malaysia at the time.
It was a new programme then, available only at Herriot Watt and City. I chose City.
Do you have any standout memories from your time studying?
I remember fondly my lecturers at City, in particular Steve Haberman and John Verrall who were great at teaching what for many are the difficult subjects of life contingencies and statistics.
What advice would you give to other Muslim graduates looking to follow in your footsteps?
We need to first state a fact, there are many non-Muslim actuaries working in Islamic Insurance companies. Being a Muslim is not a prerequisite to the job, nor is Islamic Insurance restricted to Muslims only. Indeed, there are many non-Muslims who choose to take up Islamic Insurance rather than conventional insurance in Malaysia.
It is noteworthy that although 60% of Malaysia’s population are Muslims, only 15% of the members of ASM are Muslims. What Muslim actuaries can perhaps bring to the profession though is thought leadership on the further development of Islamic Insurance. My contribution to the development of Islamic Insurance evolved from my understanding of the traditional insurance business model and its strengths and shortfalls. Respect the opinion of others and never stop learning.
Thank you to Zainal for sharing his story and inspiring Muslims and non-Muslims to become actuaries and learn more about Islamic Insurance.